Sacre Bleu! Wealthy French Push for Higher Taxes, Warren Buffett Smiles

[mawilson 2,133]

Good. Income should be income. Non-earned income should not receive preferable treatment.

I agree. It's my own business and should be taxed as such. People who risk their money by investing it in someone else's business possibly deserve a preferential rate.

[Mr. Big Dog 10,747]

People who risk their money by investing it in someone else's business possibly deserve a preferential rate.

Why? Income from gambling doesn't receive preferential tax rate treatment either. Quite the opposite.

[mawilson 2,133]

Why? Income from gambling doesn't receive preferential tax rate treatment either. Quite the opposite.

Gambling losses are deductible, however - like capital gains.

But seriously, you don't think there's a difference between financial investment and gambling?

In gambling, you never participate in the winnings of the casino. The house always wins - if you get lucky, you win some, but usually you don't.

When you invest in a company, you're going to get a return on that investment only if the company succeeds and prospers. Which often means expanding their business and creating more jobs in the process.

(And before you say "China", I'd like to point out that almost 6 million Americans work for US subsidiaries of foreign corporations, so it works both ways.)

[scandal 951]

It's just dumb luck. There were probably hundreds of similar social networking sites and his was the one that didn't fail.

Firstly, I don't think that's "dumb luck". That's right place/right time, and with the aggressiveness to push his idea through. No different that Gates, Jobs, Ellison in their day or Carnegie, Rockefeller or Ford in theirs.

Secondly, let's stay on topic. I raised the Zuckerberg example as a current modern instance of a recent billionaire. I content it was not "hard" for him to do so. Of course, we haven't defined hard, have we. Hard as in physically difficult? Of course not, ask any coal miner or melon picker what hard physical labor is. Hard as in time consuming? Of course not. Zuckerberg got rich in the time it takes most of us to get our first $10K of savings in our early 20s. Hard as in huge risk? Not really. No riskier than countless other business ventures. So, I contend, not hard.

People make fortunes in America all the time. And I applaud that. I love our free enterprise system. But I also know that these entrepreneurs benefit from our publicly supported infrastructure: Our regulated liquid and safe capital markets, our transportation and telecommunications grids, our K-12 and post-secondary education systems.

Why shouldn't those who get wealthy in a society that is so rich and blessed not also contribute back? Why shouldn't they, when we all see the massive deficits, sacrifice too? We are all bracing for service cutbacks, most of which will fall most heavily on the lower income brackets. I see nothing wrong with asking Zuckerberg and those in his stratum to share as well. He wouldn't have made his fortune if not for government DARPA-funding that created the Internet in the first place, or for countless government grants that funded the development of IETF, W3C and other bodies that standardized TCP/IP, DNS, and web protocols upon which his company Facebook depends. His wealth is a result of our American public/private system. He's not outside of that, nor is anyone - rich or poor.

[scandal 951]

Gambling losses are deductible, however - like capital gains.

But seriously, you don't think there's a difference between financial investment and gambling?

In gambling, you never participate in the winnings of the casino. The house always wins - if you get lucky, you win some, but usually you don't.

When you invest in a company, you're going to get a return on that investment only if the company succeeds and prospers. Which often means expanding their business and creating more jobs in the process.

(And before you say "China", I'd like to point out that almost 6 million Americans work for US subsidiaries of foreign corporations, so it works both ways.)

I'm fine with using the tax system to encourage business investment. I think some form of capital gains deductions can be positive. But the system we have now is warped and easily taken advantage of by sophisticated players who aren't doing the sort of long-term business investment you are talking about. We do need serious tax reform in this country - just about everyone agrees on that.

[mawilson 2,133]

Firstly, I don't think that's "dumb luck". That's right place/right time

Right place/right time is dumb luck.

[scandal 951]

Right place/right time is dumb luck.

I take it you're not seriously interested in debating tax policy, are you

[mawilson 2,133]

I take it you're not seriously interested in debating tax policy, are you

No, I pretty much agree with you in that the tax code needs to be simplified.

I'm for lower marginal rates with a broader base and fewer market-distorting tax incentives, exemptions and deductions for esoteric things.

[scandal 951]

No, I pretty much agree with you in that the tax code needs to be simplified.

I'm for lower marginal rates with a broader base and fewer market-distorting tax incentives, exemptions and deductions for esoteric things.

Revenue neutral? Or do you agree that we need to generate new revenue to help close the gap, along with spending cuts.

[mawilson 2,133]

Revenue neutral? Or do you agree that we need to generate new revenue to help close the gap, along with spending cuts.

Unless we reform the entitlement programs, the gap will keep growing - we can't just keep raising taxes to pay for it.

[scandal 951]

Unless we reform the entitlement programs, the gap will keep growing - we can't just keep raising taxes to pay for it.

You're good at evading the question

Assuming we do serious entitlement reform, including reindexing Social Security to wage gains rather than CPI, and raising benefit eligibility age. And assuming we cut back on other spending including military and discretionary.

Are you then open to revenue increases as well?

[mawilson 2,133]

You're good at evading the question

Assuming we do serious entitlement reform, including reindexing Social Security to wage gains rather than CPI, and raising benefit eligibility age. And assuming we cut back on other spending including military and discretionary.

Are you then open to revenue increases as well?

Maybe. Ultimately, I'd like to see Social Security replaced by private

401(k)-like individual savings plans, except for the very poor who for one reason

or another were unable to save for retirement (low income, disabled, elderly

immigrants, etc.) It should be something that ensures that our elderly do

not live in poverty, not an all-encompassing entitlement that everyone gets

regardless of need.

The 401(k) model in its current form would probably not work for SS - it's way

too easy to raid a 401(k) account (e.g. to pay off debt) or lose it by investing

in risky financial products. A private retirement system should be regulated

to require that the amount of assets allocated to risky securities (e.g. equities)

should fall as people get closer to retirement. Also, withdrawals should not

be allowed under any circumstances (before you reach retirement age.)

[BishopM 114]

Zuckerberg got rich in the time it takes most of us to get our first $10K of savings in our early 20s 40s.

Fixxored! &

[scandal 951]

Maybe. Ultimately, I'd like to see Social Security replaced by private

401(k)-like individual savings plans, except for the very poor who for one reason

or another were unable to save for retirement (low income, disabled, elderly

immigrants, etc.) It should be something that ensures that our elderly do

not live in poverty, not an all-encompassing entitlement that everyone gets

regardless of need.

The 401(k) model in its current form would probably not work for SS - it's way

too easy to raid a 401(k) account (e.g. to pay off debt) or lose it by investing

in risky financial products. A private retirement system should be regulated

to require that the amount of assets allocated to risky securities (e.g. equities)

should fall as people get closer to retirement. Also, withdrawals should not

be allowed under any circumstances (before you reach retirement age.)

Hypothetically then, let's say we have it your way. We privatize Social Security and reformulate it for only small segments of our society with everyone else saving for their own retirement. I'm not saying I favor this (I don't, at least not at such an extreme), but let's go with this for a moment.

That will make a real dent in the long term CBO deficit projections, no doubt. But it doesn't tackle Medicare, Medicaid, defense, interest payments on the ballooning debt, or discretionary spending. We'll still have a shortfall.

What then? Do you THEN support an actual tax revenue increase?

[_Simpson_ 250]

Not really. Not for all of them, at least. It's rare, I'll grant you that, but not necessarily hard. Mark Zuckerberg is a billionaire in his 20s and became a billionaire after only a few short years of work. I don't begrudge him one bit - I think that's wonderful. But please don't tell me it was hard, or that any rate of taxation, higher or lower, would have changed Zuckerberg's motivations to do precisely what he did.

Well he might bring his business elsewhere. They keep their servers in Prineville Oregon because the city gave them some tax breaks and a good deal all the way around. Whats to stop them from storing their servers outside the country in the future. It wont change a man's ambitions but it will change the way he does business.

Edited August 29, 2011 by _Simpson_